Hang Seng Investment Management has expressed a positive outlook on US equities and global technology stocks, according to its Director and Chief Investment Officer. The firm maintains a neutral stance on Asian emerging markets and Japanese equities, while adopting a cautious approach toward European and Chinese stock markets.
In fixed income, the company remains constructive on Asian investment-grade bonds, holds a neutral view on sovereign debt and Asian high-yield bonds, and favors medium-to-short duration US dollar bonds. Additionally, it recommends maintaining a 5-10% gold allocation within personal wealth portfolios.
The firm argues that the current artificial intelligence wave is not a repetition of the dot-com bubble, noting that while the two periods appear similar on the surface, they are fundamentally different. The present AI cycle features widespread adoption of generative AI, with surging investments in large language models and data centers, driven by more tangible demand that has evolved from conceptual ideas into computing power and real-world applications.
Investment scale in this cycle is larger and moving faster, concentrated primarily in data centers and semiconductors. Although capital expenditures are substantial, they are backed by large enterprises with robust cash flows. Despite elevated valuations, the market is dominated by leading players with clear cloud revenue streams, significantly reducing the risk of a systemic collapse.
The firm highlighted that Chinese AI models have been catching up rapidly in recent years, and Hong Kong-listed equities offer exposure to these relevant companies. Investing in Hong Kong AI stocks could provide a more comprehensive way to capitalize on AI development opportunities. Key opportunities within the Hong Kong market include broad-based indices, high-dividend stocks, and high-growth AI-themed investments.
Hang Seng Investment Management's Director and Chief Executive Officer noted that a growing number of mainland Chinese AI enterprises have listed in Hong Kong in recent years, spanning various segments such as large language models, AI chips, and industry application chains, which has continuously expanded the scope of the AI sector within the Hong Kong stock market.
Regarding capital markets activity, from the beginning of the year through the end of August, total IPO fundraising by AI value chain companies reached HKD 235 billion, accounting for approximately 65% of the overall new listing proceeds during the same period. This demonstrates that AI has evolved from a concept into a central theme driving Hong Kong's new stock market activity.